We have to
keep working to build a commercial environment in China that's friendly to
global innovation and international competition, Commerce Secretary Gary Locke
says. We are at a turning point in the U.S.-China economic
partnership.

For years, China
and the United States benefited tremendously from a trade dynamic characterized
largely by one country producing and the other consuming, as evidenced by annual
trade deficits that routinely ran well over $200 billion.

American
consumers got an impressive array of low-cost goods. And in its transition into
one of the world's top exporters, China was able to lift millions of its
citizens into a fast-growing middle class.

But it's not
sustainable. The debt-fueled consumption binge in developed countries such as
the United States is over. And countries such as China are beginning to realize
that there are limits and drawbacks to purely export-driven
growth.

That's why we
need a more equitable economic partnership -- a topic that will be central in
conversations during Chinese President Hu Jintao's state visit this week to
Washington, D.C.

This new
partnership is within our reach, and steps toward it are already
happening.

Witness Boeing's
partnership with Air China and Petro China. They're researching a new generation
of innovative aviation biofuels for the Chinese aviation
market.

Or look at Duke
Energy's collaboration with China's largest energy company, Huaneng, and the
Chinese government's Thermal Power Research Institute, which has their
scientists and researchers working together to develop cutting-edge solutions
for cleaner-burning coal and carbon sequestration.

These are but a
few of many examples of America's and China's best minds working together on
breakthrough technologies that could open up hundreds of billions of dollars in
new commercial opportunities in both China and the United States --
opportunities that could create millions of good, middle-class jobs in both
countries.

There is,
however, a sobering side to U.S.-China commercial relations: For every story
like Duke Energy's or Boeing's there are stories of exasperation from American
business leaders concerned about the commercial environment in
China.

These concerns
are shared by businesses around the world, and the most frequent complaints
revolve around lax intellectual property protection, lack of predictability and
openness in government decision-making, and a series of policies that unfairly
discriminate against foreign companies operating in China.

The complaints
are different, but the fundamental problem often boils down to the distance
between the promises of China's government and its
actions.

Look at
intellectual property. Chinese leaders have condemned intellectual property
theft in the strongest terms, and we've seen central government laws and
regulations written or amended to reflect that sentiment.

But American and
other foreign companies, in industries ranging from pharmaceuticals and
biotechnology to entertainment, still lose billions of dollars from
counterfeiting and IP theft in China every year. To cite just one example,
nearly 80 percent of the software used on computers in China is counterfeit,
according to the Business Software Alliance.

The United
States understands that making progress on these issues can be difficult. When
China has millions of people coming in from the countryside looking for work, it
isn't necessarily an easy decision to close down a factory producing counterfeit
goods, when that factory is providing badly needed jobs.

So these are
real and significant challenges. For market reforms to continue in China, it
will take constant vigilance -- not just from the United States, but from all
countries and businesses around the world that benefit from rules-based trading.
We'll also need vigilance from Chinese business and government leaders, who
themselves have a strong stake in ensuring that China is friendly to global
innovation and international competition.

In the long run,
economies with poor intellectual property protections and inconsistent
application of market access laws will lose out on generating great new ideas.
And they'll lose out on the jobs that come with producing new products -- jobs
critical to expanding middle classes.

On balance, the
competitive playing field in China is fairer to foreign firms that it was when
China first joined the World Trade Organization in 2001, and we commend China
for that.

American exports
to China were up 34 percent last year compared with 2009 and are expected to top
$100 billion next year.

But there's
still a long way to go.

That's why we've
got to keep working to build a commercial environment in China that is friendly
to global innovation and international competition -- because that's the only
sure-fire way to ensure continued prosperity for our
people.

Ultimately, all
that the United States seeks is a level playing field for its companies, where
the cost and quality of their products determines whether or not they win
business.

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We can't tell exactly what that future will look like.

But we can be
certain that it will be a better future if the Chinese and American governments
pursue cooperation over confrontation in the economic
sphere.

Cooperation that
will put millions of our people to work.

Cooperation that
will develop technologies to solve the most pressing environmental, economic and
social challenges facing the world today.

This is the
great opportunity before China and the United States. We just have to seize
it.